London's FTSE 100 ended little changed at 0.02% in the red on Monday, as investors evaluated the exchange of hostilities between the US and Iran over the weekend, with Iran claiming the effective closure of the Strait of Hormuz.
"Attacks on shipping in the Strait of Hormuz and US retaliation this week highlight the upside risk to our inflation forecast," Berenberg said July 10. "Investors' belief that the [Bank of England] will raise interest rates if oil prices rise again is a useful insurance policy that bears down on demand every time the US-Iran conflict flares up. Over time, we expect the incoming data to show that demand is already weak enough to prevent underlying inflation picking up, and the BoE to let its insurance policy of future rate hikes lapse."
In corporate news, GSK's (GSK.L) phase 2 Azur-1 trial met its primary objective after Jemperli demonstrated sustained clinical complete responses at 12 months in patients with stage II/III mismatch repair deficient/microsatellite instability-high locally advanced rectal cancer. The positive interim results will be submitted to global regulators to aid Jemperli's review, including an accelerated evaluation in the US for rectal cancer. Shares of the pharmaceutical giant were off 0.41% in closing trade.
International Consolidated Airlines Group (IAG.L) fell 2.25% to rank among the FTSE 100's worst performers as higher Brent crude prices, driven by the escalating US-Iran conflict, fueled concerns over rising jet fuel costs. Meanwhile, Deutsche Bank Research raised its price target on the airline group to 6.45 pounds from 5.40 pounds while reiterating its buy rating.
"On 19th June we raised our 2026 EBIT from ~EUR4.3bn to ~EUR4.8bn, factoring in the benefit of lower forward fuel prices for unhedged requirements in 2H26, while leaving our unit rev assumptions unchanged," analysts said. "Given the insights from our recent fares tracker however, we now lower our full year [passenger revenue per available seat kilometer] assumption from +4% to +2% and our EBIT moves back to ~EUR4.3bn. The volatility caused by the on/off conflict in the Middle East is making it hard to be precise with this year's earnings outcome."
On the upside, Computacenter (CCC.L) jumped 2.43% after BofA Global Research initiated its coverage with a buy rating, noting that the technology and services provider is benefiting from the rapid growth in artificial intelligence-related infrastructure investments.
Next, traders will receive the UK's monthly gross domestic product report for May on Thursday, before Andy Burnham's widely expected confirmation as Labour Party leader on Friday and as prime minister on July 20.